“You seem to be under the impression that the California Development Company is a Southern Pacific enterprise. This is erroneous. It had nothing to do with its work, or the opening of the canal. We are not interested in its stock and in no way control it. We have loaned it some money to assist in dealing with the situation. What the Southern Pacific has done was for the protection of the settlers as well as of its own tracks, but we have determined to remove the tracks onto high ground anyway. However, in view of your message, I am giving authority to the Southern Pacific officers in the West to proceed at once with efforts to repair the break, trusting that the Government, as soon as you can procure the necessary Congressional action, will assist us with the burden.” The contention of the Government was that inasmuch as the Southern Pacific Company loaned $200,000 to the California Development Company in June, 1905, and assumed temporary control of the latter’s affairs for the purpose of safeguarding its loan, the lending company thereby made itself responsible for all the unforeseen consequences of a ditch dug by the borrowing company almost a year earlier. This contention will not bear a moment’s scrutiny. The Southern Pacific Company did not, at any time, own any of the Development Company’s stock. The shares pledged as collateral for the loan were in the hands of a trustee. The Southern Pacific Company did not even elect the president and three directors of the Development Company. They were elected by the latter’s stockholders under the terms of the loan agreement.[15] The Southern Pacific was a creditor of the Development Company, but in no sense a “successor in interest” by virtue of ownership. The lower Mexican intake, which admitted the river to the Valley and caused the disaster, was dug long before the Southern Pacific Company had any control whatever over the Development Company, and it would be a violation of the most elementary principles of equity if a lender were held responsible for all previous transactions of a borrower, merely because the latter had voluntarily agreed to share control of his business in order to obtain the loan. If a farmer goes to a bank, gives a mortgage on his farm as security for a loan, and agrees that a representative of the bank shall supervise his agricultural operations until the loan is repaid, the bank does not become responsible for a dam across a stream on the farmer’s property built by the farmer himself a year before he had any relations with the bank. The bank might be responsible for a dam built under the direction of its representative, but not for a dam built by the farmer a year before such representative was appointed. When President Roosevelt received Mr. Harriman’s telegram of December 20th, saying that orders had been given to proceed with the work, he replied in the following words: